It's a combination of the nasty characters of Dallas, the back-stabbing of day-time soap operas, the devious behavior of a Savings and Loan scam artist and the trust-worthiness of a Clinton State Trooper.

 

The story behind the fall of Maico, once the most prestigious European motocrosser made, is a bizarre and tortuous tale. This writer was able to acquire documents, copies of invoices, internal memos, legal papers, documentation from key sources and statements from key personnel.

Like most people, we thought that Maico simply fell on hard times, or fell apart at the seams from poor business practices. However, when we got the real facts and inside information, it became apparent that plain old greed and an internal family takeover brought the company to its knees.
 
THE GLORY DAYS
Dirt bikes started becoming enormously popular in the mid and late 60s in the United States. By 1970, the big hitters in the game were CZ, Husky and Maico. If you rode one of these, you were among the elite. You had "Yur-peen" iron. Your bike handled, had correct power and went where it was pointed with no ugly surprises.

Your options were few: You rode an ill-handling, utterly reliable Japanese bike, or some half-finished British or Italian machine made up of ill-matched parts.
 
Right around 1971, the Maico was so superior in handling and power, that it was almost like cheating. I can recall being a back-of-the-pack Novice with a Yamaha DT-1, then almost immediately after buying a 400 Maico, I actually started winning races!

This was as trick as a Maico got in 1972; it had a Yamaha front hub, Koni shocks and plenty of Wheelsmith goodies. The power of the big-bore Maicos was not only there in abundance, it was smooth from idle all the way to peak revs. A properly jetted 400 or 440 Maico would simply eat any other bike of that era alive in the race to the first turn.

Certainly, they were fussy. Learning to live with the temperature-sensitive Bing carb required patience and a tool-box full of jets. The primary chain driven left side of the engine required constant attention, and key nuts and bolts had to be secured with industrial strength Loctite. The front brake was more decorative than effective. Rims, grips, air boots, cables and fiberglass fenders were all disposable items.

All that aside, the Maicos would turn under anything else on the track, go straighter than a tossed spear and accelerate like the Hounds of Hell were after it. Forget the marginal brakes; the rider could simply concentrate on keeping the throttle pegged and passing everything else in sight, with absurd ease.

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Sales, during this era, were spectacular. Dealers reported groups of riding buddies coming into their shops and all of them buying new Maicos at the same time. One dealer noted that when the new '71 400s hit the market, he received 40 orders for bikes on a single Saturday.

Ah, yes, those were glorious days. Simple days. Days when a brand new 400 Maico sold for about $1100. You could race it for a year, then sell it for maybe $800 or so.

In the mid-70s, it seemed that Maico was the only one to get long travel right. The AW series machines were the easiest bikes of that era to ride aggressively.

When long travel hit, Maico was right there with the AW series. Girling gas shocks were moved forward on a beefed-up swingarm, and the familiar forward-axle forks got longer to match. More and better power was extracted from the heavily-finned engines.

All through the mid and late '70s, the big Maicos dominated, in spite of an indifference in attention to detail. When the Japanese companies started learning how to produce competitive big bikes, Maico responded with the phenomenal 1981 490.

Part of the powerhouse Maico motocross team of the mid-70s: Far right - Willi Bauer, center - Adolph Weil, back to camera - Gerrit Wolsink.

A brute of a bike, it had a staggering spread of power and all the legendary Maico handling habits, in spite of wimpy shocks. People bought the bike in droves, and even willingly paid the extra money for decent after market shocks.

The bike was so good, that every Japanese factory bought several 490's and tore them apart down to the last nut and bolt to study them. It took another three years before Japan figured out how to successfully copy the power-band of the 490 Maico ... and the copies were just that, pale copies.

The writer, cursed with below average skills, was able to win races with the awesome 1981 Maico 490.

With this kind of brilliance, one might think that success was assured at the Maico factory, but as we shall see, there were inner forces at work to undermine all the good times.

In 1983, Maico came out with even more outrageous power. It was so good, so flexible, so usable, that to this very day, it's held up as a standard for modern MX bikes to shoot for. I distinctly recall the press day preview of the '83 490 and the introduction of the Sand Spider models.

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It was at Indian Dunes, and the gathered magazine types and selected dealers who got to ride the bike for a few laps came back slack-jawed and shaking. The bike was a pure brute, but a controllable one. After riding the bike, I was equally impressed, but concerned at the same time. The rear suspension was horribly off, so much so, that the bike sagged in the rear and the shock did little more than move up and down, seemingly at random.

When I expressed my concerns to the Maico people, they shrugged and said this was simply a prototype, and that all the settings were off. The production bikes, we were assured, would be correct in all respects.
 
THE NIGHTMARE OF 1982/83
People bought the new Maicos in droves, based mostly on enthusiastic magazine test reports. Few of the magazines knew that the distributors gave the press carefully prepped bikes, with most of the flaws removed.

But when the average rider/racer out there bought the bike, the fan started getting pelted with dung. Shocks broke on almost every 1982 bike sold. In 1983, transmissions started shredding gears like popcorn, and even bizarre things like rear hubs exploded.

Dealers started getting bombarded with complaints from irritated customers, and even lawsuits from injured customers. When a person buys a bike, he doesn't expect the rear end to collapse from a broken shock when landing from a normal jump. And he certainly wouldn't expect a rear hub to explode when braking at the end of a high-speed straight-a-way!

In spite of heroic attempts by the U.S. Maico distributor to warranty all the claims, the harm was done. By 1984, Maico was in bankruptcy. From that point forward, no matter who tried to salvage the marque (M-Star being the first futile effort), it was all over. Maico, as we knew it, was dust.
 
BACKGROUND YOU NEED TO KNOW
Maico was founded in the early '30s by Otto Maisch and his brother, Wilhelm. They were equal partners in the company until the end of World War II. Things got strange after the war, as Wilhelm had been a Nazi, while Otto and his family stayed out of politics and concentrated on business.

Otto Maisch: Co-Founder of Maico Motorcycles
Because Wilhelm had been a member of the National-Socialist Party, by law, he was only eligible to be a minority stockholder in the new company. This gave Otto 60 percent control and 40 percent went to Wilhelm's family. In 1957, Wilhelm was paralyzed, and became little more than a figure head in the company, leaving the day-to-day operations to Otto.

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Wilhelm's sons completed their education and were immediately given jobs in the Maico company. Hans became a motocross rider and helped with input on developing the machines. Peter was put in administration and, because of lacking any real skills, was also made a media/press relations person. Wilhelm Jr., who had some engineering skills, was put in charge of Technical Development and Production.

Maico grew so rapidly that it was necessary to establish a distribution network in the United States. Maico Motorcycles Inc., was established on the East Coast and Cooper Motors handled the booming West Coast trade.

In their hey-day, Maico sold more Open Class bikes than Honda does today in total motocross bike sales. By 1976, Frank Cooper (West Coast distributor) retired and Maico took over distribution and sales in the U.S. with a company of their own. At this period in dirt bike history, Maico sold anywhere from 30 to 50 percent of their total production in the U.S. Their image at the time compared favorably with Mercedes and Porsche.

Right around 1980, Maico started feeling pressure from the relentless Japanese manufacturers, and was forced to respond with some new "breakthrough" machinery. The new 1981 250 and 490 engines were the result of that pressure.

In 1981, Maico was the world leader in 500cc motocross bike sales. In comparison, giants like Suzuki, were selling a mere 1500 open class bikes per year in the U.S.

But the suspension revolution was now in full swing, and Maico realized that they had to come up with a modern single-shock design. To accomplish this, Maico was forced to borrow money to design a completely new system. They ran into a brick wall when the Credit Bank of Baden Wurttemberg turned down their loan application because the Wilhelm Maisch family refused to co-sign and put up their share of collateral for the loan. The Otto Maisch side of the family was forced to sink almost every remaining Mark they had to save the company.
 
THE BEGINNING OF THE END
Here's where the plot thickens. And this is the point in time where the Wilhelm Maisch family started to tighten the screws on Otto and his clan.

The 1982 Maico was a disaster, both in concept and acceptance by the off-road public. It was their first single shock concept, and rather than use a tried-and-true approach, the Wilhelm Maisch family screamed long, loud and hard to keep costs down. Therefore, the bikes came equipped with Italian Corte & Cosso shocks. While Corte & Cosso had a great reputation for building shocks for Ferraris, their experience in dirt bikes was pathetic.

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The shocks were the wrong length, and not designed for the correct stroke. Worse, the top and bottom frame shock mounts didn't line up at all, and when the shock was stroked fully, it would cock to one side and either bend, or worse yet, break.

The rear suspension was so poorly designed, that the shocks had to be hammered into their mounts with large brass hammers at the factory. When the U.S. distributors started to receive complaints from unhappy owners, they were forced to remove the damaged shocks with large pry bars.

Further investigation of new bikes still in the crates, showed that virtually every bike was delivered with the faulty shock and mounting design.

Otto Maisch directed that new Ohlins shocks be supplied free of charge under warranty, with proper spacers to allow the shock to work. These Ohlins cost twice as much as the Corte & Cosso units, but it was the only way to salvage a ruinous situation. At the time, no one understood how such a bizarre thing could have happened. Since Wilhelm was in charge of development, he tried to blame it on Corte & Cosso, but the Ohlins engineers noted that no shock would have survived with the system designed like it was!

Knowing full well that they couldn't face another year without meeting the Japanese bikes on at least an equal basis, Otto Maisch put the pressure on the factory - and Wilhelm Maisch, Jr. - to make the 1983 Maico a landmark model. It had to be good. Better than good. It had to be great!

I had a chance to ride a pre-production bike four months before the press saw the machines. They air-freighted a new generation motor over and we stuffed it in an existing bike, and went testing. Good God almighty! What an engine!!! The thing pulled like a freight train on nitrous oxide. I fell in love with the engine and even went so far as to help the company come up with a trick name for the new bike: The Spider. And for the five speed desert version, I came up with the Sand Spider.

If Maico thought the 1982 model was a problem, the 1983 bikes made all that seem pale by comparison. While the initial reception at the press day was awesome, when the production bikes hit the real world, it was pure grief. The dealers got hammered against the wall. Complaints poured in. Riders bitched loudly, as well they should.

Money poured out of the factory, while very little was coming in. Sales dropped. The reputation of Maico plummeted. The old Maico-Breako slogan was revived in full force.

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And even though the factory had covered all the dead shocks in 1982, eating wads of money in the process, new grief cropped up with the Spider models. Gear boxes started self-destructing at an alarming rate, and as said earlier, hubs blew up like cheap balloons. Confidence in the Maico disintegrated. Sales virtually stopped.

Dealers were forced to sell bikes at no profit, or at a loss, just to clear the floors. By the end of 1983, Maico had a stake driven into its heart.

Strangely, during this same sad year, there were Maico owners who never had a bit of trouble. The gearboxes worked just fine. No hubs broke. And the revised Ohlins shocks went up and down quite nicely, thank you.

Behind the scenes, the Wilhelm Maisch family drove the final nail home in the coffin. While the Otto Maisch family faced bankruptcy, the Wilhelm Maisch family initiated an incredible media campaign against the company.

Why? One can assume, of course, that they wanted to take over the whole deal. One can also raise a suspect eye at the words of Wilhelm Maisch, Jr., at a family Christmas gathering in 1981, when an intoxicated Herr Maisch, Jr., bragged to the Stickel family, that a time would come shortly when the two Maisch families would no longer be friends, and Otto would grow to hate him.
 
THE DOLLAR/MARK TRAIL
Up until this point, Maico had been a real money-maker. Consider these numbers:

    * 1979/80. Total sales in DM - 23,106,000.
    * 1980/81. Total sales in DM - 28,573,000

(At this time, the DM was worth 1.90 US $)

    * 1981. Maico West and U.S. sales = 2,200 dirt bikes.
    * Profit of Maico USA, Sept. 30/91 = $1,075,211
    * Profit of Maico West. Sept. 30/91 = $71,119

A 1981 motorcycle magazine survey showed that 6.9 percent of the readers intended to buy new Maicos, compared to 3.6 percent from the previous year. Wilhelm Maisch, Jr. estimated that Maico would show a profit of DM 2,861,461 for the year 1982. When the bottom line for the year was calculated, a profit of only DM 300,000 was shown. Bank loan payments of DM 750,000 held that profit down a bit.

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Sept.9/82. The Landerskreditbank Stuttgart demanded a balance sheet from all Maico firms to enable them to make a decision on future loans.

Dec. 12/82. The BTR Bank showed a balance sheet of the assets of Maico, Germany, to be DM 8,817,687, after all existing liabilities have been settled. The bank stated that they would loan the Maisch families the needed moneys to expand, if both families would sign. The Wilhelm Maisch family said they would only sign such an agreement, if they could have 50 % of the action. This didn't sound like such bad deal, except that they didn't want to pay for the extra percentage. BOOM! The deal was dead in its tracks. In an amazing attempt to help save the company, Bryan Goss (the English importer), and Van Dijck (Holland) publicly noted they were willing to advance DM 450,000 to help save Maico.

The not-too-subtle form of economic blackmail from the Maisch brothers flipped the cork of the already irritated European distributors, and they demanded that Otto get rid of them. So, in December of 1982, the Maisch brothers were dismissed. Adios.
 
Deadly figures:
January 1983 losses = DM 2,354,000
March 1983 losses = DM 948,000.
Money was vaporizing at an alarming rate.
 
MAICO, BREAK-O; DESIGNED TO FAIL
Maico was still reeling from the Corte & Cosso shock fiasco in the 1982 models, and absolutely had to come out with a winner to erase the bad memories of destroyed rear suspension systems.

The 1983 models were released to the dealers in November 1982, and initially, the dealers were ecstatic. Here's what Wheelsmith had to say: "You can tell all the workers at the factory that the new Maicos are so good, we can't believe it. Yesterday, I got to ride the new 490 for the first time. Words cannot describe the way I feel about the bikes. I sold five bikes the first day I had them in the shop. If this is any idea of things to come, this will be the best year for Maico and Wheelsmith. Again, thanks to all the workers for bringing to the USA the best bike in the world."

Greg at Wheelsmith surely looked back at this statement sadly a short time later, as the grief started happening almost immediately.  About 430 rear wheel hubs that were installed on bikes, suddenly started failing. Several concerned dealers had the faulty hubs checked and found they were never heat-hardened.

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Gear-boxes started exploding like popcorn. Same story. Improper heat-treating. Receipts were found from the Mohr & Lopez company (the contracted heat-treaters), which proved that the gears received only one part of the heat-treating process, rather than two. And guess where the orders came from for the change in heat-treating procedures? Right from the Technical Director, Wilhelm Maisch, Jr.!

It was found out by accident, when a memo was discovered from a tax consultant named Brosamle, written to the Maisch brothers, telling them what was needed to force Maico into bankruptcy and how to bid to take it over once the deed was done.
As part of the plan to destroy Maico, the brothers allegedly started a campaign via their friends in the press, and an onslaught of negative articles started appearing. Peter Maisch, the press relations expert, was seen constantly hanging around the Sudwest-Presse building in Tubingen right before the most destructive article came out, and was later seen at the race track, laughing and joking with the reporter who wrote the article.

Numerous articles appeared, and in every instance, the reporter was a close acquaintance of Peter Maisch. The most damaging was a malicious article that appeared in an English magazine, causing sales in England to come to a virtual stand-still. The British importer, Goss, pointed out that the article was written by a journalist who was a close friend of Peter Maisch.

Maico desperately tried to borrow money to warranty all the damaged bikes, but when the banks saw the stories in the press, they slammed doors in the face of Otto Maisch. In desperation, Otto and his daughters depleted their savings and tried to save the company, but the internal sabotage had been done far too effectively. Several riders in the US had been hurt because of the defective exploding hubs and weakened transmissions.

The law suits started, and that was the beginning of the end. The final nail in the coffin was hammered home, when an American racer, David Dion Scott (Virginia) was paralyzed when his rear hub failed, causing a brutal crash. His law suit not only put a virtual halt to further importation of the bikes, but it had US dealers scared to death of becoming involved in the litigation. Numerous bikes were returned to the distributor, and others were dumped at a fraction of their true value.

Otto Maisch made one last desperate appeal to the government banks to help the company through the problem, but on May 10, 1983, the District of Baden-Wurttemberg flatly refused to give the Maico GmbH credit. The notorious publicity campaign had done its job; no one would lend Maico a spare Mark.

On May 10, 1983, Maico GmbH declared bankruptcy.

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Smelling blood, the Maisch brothers quickly formed a company, and by pulling strings with the bankruptcy receiver, Dr. Grub, were able to get control of the company for a mere DM 300,000 ... a bit more than a hundred thousand dollars US.

For the price of a CNC machine, the Maisch Brothers now owned a company with at least 7 to 8 million Marks worth of equipment, machinery, inventory and buildings.

The three brothers had, at this point, fulfilled their goal of owning the company and ousting Otto Maisch, and were able to get it for a tiny fraction of its true worth.
 
THE AFTER-MATH
An internal memo we saw tended to point out the sabotage theory in a rather intimidating fashion. In the memo, Wilhelm Maisch, Jr., admitted that his department had used the wrong material in the gear-boxes and that this material had been improperly hardened. Since this was a primary responsibility of the Technical Division, one can only raise an eyebrow in shock. Also, this information could have only come from Wilhelm, as he was the only one with the authority to make any changes in material selection and heat-treating processes.

Driving the point home, Wilhelm drafted a rather smug letter to Theo Holznienkemper (a former US Maico manager) on February 23, 1984, in which he said that it had always been his dream to take over the Maico company, and now that dream had been realized.

Oddly enough, the Maico US headquarters in California and Virginia were still owned by the Otto Maisch family, and the factory still owed them all kinds of money from the hundreds of failed bike warranty claims.

The Maisch brothers tried every trick in the books to get control of the existing Maico distributing, but couldn't pull it off. The lawyers from both families had a field day, trading a barrage of claims, threats and counter-claims.

They were fighting over very little, as the dealer network had obviously disintegrated, and the fact that the horribly flawed bikes were the direct result of Wilhelm Maisch, Jr., did not sit well with most. It's one thing to fire off a shot; it's another thing entirely to shoot yourself in the foot in the process.

In desperation, the Maisch brothers, who were now properly heat-treating hubs and gears, were desperately trying to sell bikes. The European distributors were irritated beyond belief, and showed little - if any - interest.

The only way the "new" factory could succeed would be to recapture the massive American market, the one where the name Maico had once been legendary.

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Company that handled Sachs and KTM in years past. The "new" bike was called the M-Star, a truly dumb sounding name.

The 250 was basically the 1983 Maico, with all the warts removed, and a water-cooled barrel. The fins were gone, but the old drum brakes were still used at both ends.

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A deal was worked out with Ted Lapadaikis, the force behind the Hercules Distributing Company that handled Sachs and KTM in years past. The "new" bike was called the M-Star, a truly dumb sounding name.

The 250 was basically the 1983 Maico, with all the warts removed, and a water-cooled barrel. The fins were gone, but the old drum brakes were still used at both ends.

Who Killed Maico?